my local Asda price is 119.7p ... I saw it last Saturday and it struck me that we haven't seen prices so low in many years

Again I have to ask:

lancashire lass wrote:Interestingly, isn't our gas and electricity costs supposed to be linked to the price of oil? When oil prices rise, gas and electricity usually follow with almost immediate effect ...

as you've thrown the question out a couple of times now, forgive me for giving you the Robert Peston answer that I hadn't done before for fear of sounding smartypants.......

I think they are only linked indirectly. Not all oil-producing wells or refineries produce gas in quantity, which is when you see it burnt off as a flare since for them it's more economic to burn it rather than collect and and sell it. Gas exploration tends to be a separate activity so its economics are a bit detached, though the costs are probably similar. The prices of all fuels tend to be linked by substitution, so if the price of one goes up you switch to another, but that tends to drive the price up (either demand/capacity restrictions or profiteering). When it goes the other way and your choice of fuel goes down in price, there's no reason to switch, so the supply market isn't affected and price tends not to go down beyond any economy of scale in providing to lots of users rather than few. If you happen to have an oil refinery or a power station you might drop your prices to compete, but the need to do that would be affected by how easy it is to switch, and for most people it isn't because there's a cost and a time taken to do that.I think this means that prices for electricity and gas won't follow as closely as we might like.